IDEAS home Printed from https://ideas.repec.org/a/eee/ecmode/v39y2014icp257-264.html
   My bibliography  Save this article

Joint decision on pricing and advertising for competing retailers under emergency purchasing

Author

Listed:
  • Liu, Bin
  • Ma, Xindi
  • Zhang, Rong

Abstract

This paper investigates an inventory decision problem under the pricing and advertising dependent stochastic demand, and considers a joint decision on pricing and advertising for competing retailers who operate short-life-cycle products under emergency purchasing. The results indicate that the retailer always prefers to advertise whether under a single or dual channel system. However, both the optimal prices and stocks increase, whereas customer welfare decreases.

Suggested Citation

  • Liu, Bin & Ma, Xindi & Zhang, Rong, 2014. "Joint decision on pricing and advertising for competing retailers under emergency purchasing," Economic Modelling, Elsevier, vol. 39(C), pages 257-264.
    • Handle: RePEc:eee:ecmode:v:39:y:2014:i:c:p:257-264
    DOI: 10.1016/j.econmod.2014.03.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264999314000923
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econmod.2014.03.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cai, Gangshu (George), 2010. "Channel Selection and Coordination in Dual-Channel Supply Chains," Journal of Retailing, Elsevier, vol. 86(1), pages 22-36.
    2. Victor F. Araman & Ioana Popescu, 2010. "Media Revenue Management with Audience Uncertainty: Balancing Upfront and Spot Market Sales," Manufacturing & Service Operations Management, INFORMS, vol. 12(2), pages 190-212, December.
    3. George Tagaras & Dimitrios Vlachos, 2001. "A Periodic Review Inventory System with Emergency Replenishments," Management Science, INFORMS, vol. 47(3), pages 415-429, March.
    4. Zhang, Rong & Liu, Bin & Wang, Wenliang, 2012. "Pricing decisions in a dual channels system with different power structures," Economic Modelling, Elsevier, vol. 29(2), pages 523-533.
    5. Zhengping Wu & Wanshan Zhu & Pascale Crama, 2011. "The Newsvendor Problem with Advertising Revenue," Manufacturing & Service Operations Management, INFORMS, vol. 13(3), pages 281-296, July.
    6. Preyas S. Desai, 1997. "Advertising Fee in Business-Format Franchising," Management Science, INFORMS, vol. 43(10), pages 1401-1419, October.
    7. Ray, Saibal, 2005. "An integrated operations-marketing model for innovative products and services," International Journal of Production Economics, Elsevier, vol. 95(3), pages 327-345, March.
    8. Yuxin Chen & Yogesh V. Joshi & Jagmohan S. Raju & Z. John Zhang, 2009. "A Theory of Combative Advertising," Marketing Science, INFORMS, vol. 28(1), pages 1-19, 01-02.
    9. Ganesh Iyer & David Soberman & J. Miguel Villas-Boas, 2005. "The Targeting of Advertising," Marketing Science, INFORMS, vol. 24(3), pages 461-476, May.
    10. Nicholas C. Petruzzi & Maqbool Dada, 1999. "Pricing and the Newsvendor Problem: A Review with Extensions," Operations Research, INFORMS, vol. 47(2), pages 183-194, April.
    11. Fangruo Chen, 2005. "Salesforce Incentives, Market Information, and Production/Inventory Planning," Management Science, INFORMS, vol. 51(1), pages 60-75, January.
    12. Andy A. Tsay & Narendra Agrawal, 2000. "Channel Dynamics Under Price and Service Competition," Manufacturing & Service Operations Management, INFORMS, vol. 2(4), pages 372-391, August.
    13. Vipul Agrawal & Sridhar Seshadri, 2000. "Impact of Uncertainty and Risk Aversion on Price and Order Quantity in the Newsvendor Problem," Manufacturing & Service Operations Management, INFORMS, vol. 2(4), pages 410-423, July.
    14. Huang, Zhimin & Li, Susan X., 2001. "Co-op advertising models in manufacturer-retailer supply chains: A game theory approach," European Journal of Operational Research, Elsevier, vol. 135(3), pages 527-544, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xu, Qi & Fu, Guanghua & Fan, Dandan, 2020. "Service sharing, profit mode and coordination mechanism in the Online-to-Offline retail market," Economic Modelling, Elsevier, vol. 91(C), pages 659-669.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rong Zhang & Bin Liu, 2017. "Group buying decisions of competing retailers with emergency procurement," Annals of Operations Research, Springer, vol. 257(1), pages 317-333, October.
    2. Zhengping Wu & Wanshan Zhu & Pascale Crama, 2011. "The Newsvendor Problem with Advertising Revenue," Manufacturing & Service Operations Management, INFORMS, vol. 13(3), pages 281-296, July.
    3. Chen, Xu & Wang, Xiaojun, 2015. "Free or bundled: Channel selection decisions under different power structures," Omega, Elsevier, vol. 53(C), pages 11-20.
    4. Wang, Charles X. & Qian, Zhuang & Zhao, Yabing, 2018. "Impact of manufacturer and retailer's market pricing power on customer satisfaction incentives in supply chains," International Journal of Production Economics, Elsevier, vol. 205(C), pages 98-112.
    5. Youhua (Frank) Chen & Ye Lu & Minghui Xu, 2012. "Optimal inventory control policy for periodic‐review inventory systems with inventory‐level‐dependent demand," Naval Research Logistics (NRL), John Wiley & Sons, vol. 59(6), pages 430-440, September.
    6. Wang, Qingwei & Zheng, Meimei & Lee, Ka-Man & Shi, Xiaoqian & Shen, Yichi & Pan, Ershun, 2024. "Optimal product and after-sales service decisions considering risk attitudes under price-dependent uncertain demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 182(C).
    7. Mandal, Prasenjit & Kaul, Rupali & Jain, Tarun, 2018. "Stocking and pricing decisions under endogenous demand and reference point effects," European Journal of Operational Research, Elsevier, vol. 264(1), pages 181-199.
    8. Heese, H. Sebastian & Swaminathan, Jayashankar M., 2010. "Inventory and sales effort management under unobservable lost sales," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1263-1268, December.
    9. Syed Asif Raza, 2022. "A bibliometric analysis of pricing models in supply chain," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(2), pages 228-251, April.
    10. Ma, Lidan & Zhang, Rong & Guo, Sandang & Liu, Bin, 2012. "Pricing decisions and strategies selection of dominant manufacturer in dual-channel supply chain," Economic Modelling, Elsevier, vol. 29(6), pages 2558-2565.
    11. Jianghua Wu & Zepeng Wang & Chenchen Zhao, 2023. "Effects of production capacity and substitutability on optimal pricing and inventory policies," Annals of Operations Research, Springer, vol. 326(1), pages 341-367, July.
    12. Leon Yang Chu & Guoming Lai, 2013. "Salesforce Contracting Under Demand Censorship," Manufacturing & Service Operations Management, INFORMS, vol. 15(2), pages 320-334, May.
    13. Mihai Banciu & Esther Gal-Or & Prakash Mirchandani, 2010. "Bundling Strategies When Products Are Vertically Differentiated and Capacities Are Limited," Management Science, INFORMS, vol. 56(12), pages 2207-2223, December.
    14. Vishal Gaur & Young-Hoon Park, 2007. "Asymmetric Consumer Learning and Inventory Competition," Management Science, INFORMS, vol. 53(2), pages 227-240, February.
    15. Dmitri Kuksov & Ashutosh Prasad & Mohammad Zia, 2017. "In-Store Advertising by Competitors," Marketing Science, INFORMS, vol. 36(3), pages 402-425, May.
    16. Dai, Yue & Chao, Xiuli, 2016. "Price delegation and salesforce contract design with asymmetric risk aversion coefficient of sales agents," International Journal of Production Economics, Elsevier, vol. 172(C), pages 31-42.
    17. Duan, Housheng & Deng, Sijing & Song, Haiqing & Xu, Jiayan, 2021. "The impacts of sales efforts and mode of payment on the competition between agent and retailer," Omega, Elsevier, vol. 103(C).
    18. Chen, Kebing & Xiao, Tiaojun, 2009. "Demand disruption and coordination of the supply chain with a dominant retailer," European Journal of Operational Research, Elsevier, vol. 197(1), pages 225-234, August.
    19. Qi Feng & Sirong Luo & J. George Shanthikumar, 2020. "Integrating Dynamic Pricing with Inventory Decisions Under Lost Sales," Management Science, INFORMS, vol. 66(5), pages 2232-2247, May.
    20. Serel, Doğan A., 2017. "A single-period stocking and pricing problem involving stochastic emergency supply," International Journal of Production Economics, Elsevier, vol. 185(C), pages 180-195.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:39:y:2014:i:c:p:257-264. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30411 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.